Federal loans can still help students stay in college
By Carli Harris
Issue date: 5/6/09 Section: News
With the American economy in such a severe recession, many students are experiencing difficulties obtaining the same privately funded student loans that they used to qualify for. However, federal student aid is still available to qualifying students.
On May 7, 2008 former United States President George W. Bush signed a bill that helped to guarantee student loan availability. It has become more difficult to get credit-based loans such as the Parent Plus loan, but federally guaranteed loans such as the Stafford loan are still available to qualifying students. In addition, if a parent is denied a Parent Plus loan, the student's available Stafford Loan money increases by double.
The fact remains that many students are unaware of financial aid policies, and in the face of the current economic situation they assume that if they are denied a necessary private loan, then they will simply be unable to attend college. Erica McClellan, a freshman here at Langston, found herself with some financial aid issues that almost prevented her from enrolling.
"My parents made too much money last year and because of that, the money I was awarded was reduced. It was a stressful situation, but it all worked out okay," McClellan said.
With the help of the financial aid department, she was able to receive more Federal loan money and enroll in classes this semester.
In order for colleges and universities to maximize their ability to help the students who desperately need it, it is important that federal loans are not left unpaid and allowed to go into default.
"The Department of Education keeps track of the percentage of students from each university who default on their student loans. This is known as the school's default rate," said Theresa Gomez, acting assistant director of the Langston University financial aid department. "If a school's default rate gets too high, it can affect the schools ability to continue in the student loan programs."
The current default rate at Langston is 17.3 percent, which means 17.3 percent of all the students who are supposed to be paying back loans have defaulted. However, Langston students are not the only ones who are finding it difficult to repay federal loans. According to a preliminary report by the US Department of Education, the national average default rate in 2008 rose from 5.2 percent the previous year to 6.9 percent.
With all the ups and downs the economy has endured, and will continue to endure, the most important thing for students to remember is that federal funding for college is guaranteed to them by the US Department of Education. If they need additional money and they (or their parents) cannot qualify for a credit-based loan, the amount of aid from the federal government can be increased. It may require a little extra effort and perseverance to obtain, but the money is still available.
On May 7, 2008 former United States President George W. Bush signed a bill that helped to guarantee student loan availability. It has become more difficult to get credit-based loans such as the Parent Plus loan, but federally guaranteed loans such as the Stafford loan are still available to qualifying students. In addition, if a parent is denied a Parent Plus loan, the student's available Stafford Loan money increases by double.
The fact remains that many students are unaware of financial aid policies, and in the face of the current economic situation they assume that if they are denied a necessary private loan, then they will simply be unable to attend college. Erica McClellan, a freshman here at Langston, found herself with some financial aid issues that almost prevented her from enrolling.
"My parents made too much money last year and because of that, the money I was awarded was reduced. It was a stressful situation, but it all worked out okay," McClellan said.
With the help of the financial aid department, she was able to receive more Federal loan money and enroll in classes this semester.
In order for colleges and universities to maximize their ability to help the students who desperately need it, it is important that federal loans are not left unpaid and allowed to go into default.
"The Department of Education keeps track of the percentage of students from each university who default on their student loans. This is known as the school's default rate," said Theresa Gomez, acting assistant director of the Langston University financial aid department. "If a school's default rate gets too high, it can affect the schools ability to continue in the student loan programs."
The current default rate at Langston is 17.3 percent, which means 17.3 percent of all the students who are supposed to be paying back loans have defaulted. However, Langston students are not the only ones who are finding it difficult to repay federal loans. According to a preliminary report by the US Department of Education, the national average default rate in 2008 rose from 5.2 percent the previous year to 6.9 percent.
With all the ups and downs the economy has endured, and will continue to endure, the most important thing for students to remember is that federal funding for college is guaranteed to them by the US Department of Education. If they need additional money and they (or their parents) cannot qualify for a credit-based loan, the amount of aid from the federal government can be increased. It may require a little extra effort and perseverance to obtain, but the money is still available.
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